Introduction

Aerodrome Finance, a decentralized liquidity protocol operating on Base, has witnessed a remarkable 100% spike in price over just the past four days.

What propelled this sudden rally, and what lies ahead for AERO's trajectory?

The surge of AERO began on February 26 following an investment disclosure by the Base Ecosystem Fund, managed by @cbventures, focusing on emerging onchain projects within the @base ecosystem. This investment announcement triggered a swift escalation in token value, with a subsequent public endorsement from Coinbase escalating AERO's value eightfold in a monumental rally.

It is observed that With its current fully diluted valuation (FDV) towering at $700 million, Aerodrome's FDV/TVL ratio of 2.5 outpaces industry stalwarts like Curve and Velodrome, underpinning its meteoric growth trajectory despite potentially heightened valuation concerns. Aerodrome's growth narrative, along with the backing of prominent investors, justifies the protocol's entrancing valuation.

Coinbase's support has not only bolstered Aerodrome's total value locked (TVL) but has also catalyzed a substantial surge in swap demand, marking a significant increase of 103% and 153% in TVL and swaps, respectively, over the last month. This surge in transactional activity, coupled with reduced transaction fees benefiting Aerodrome users, is poised to further elevate transaction volumes, enhance yields, and draw additional liquidity into the protocol.

Conclusion

Although Coinbase's intentions regarding a potential token launch or airdrop for Base remain shrouded in ambiguity, speculations are rife about Base's potential spin-off from its publicly traded parent entity to introduce a native token and conduct an airdrop for early adopters. In the event of impending clarity on Coinbase's strategic direction, the resulting speculative frenzy could drive a surge in trading activity, enriching swap volumes, and amplifying liquidity cascading into the premier swap platform of Base: Aerodrome.